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Seattle Raises Minimum Wage To $15 An Hour

Date: June 04, 2014

Wage Highest In Nation, Sets Stage For Others To Follow

UPDATE: Franchisees Challenge Seattle Minimum Wage Law

On Monday, the Seattle City Council unanimously voted to gradually raise the minimum wage to $15 an hour, which would make it the highest in the nation. The current state minimum wage is $9.32 an hour. For businesses with 500 or more workers, the wage will rise to $15 an hour by 2017 if the companies do not provide health insurance. For companies that do provide health insurance, the new minimum wage phases in by 2018. For businesses with fewer than 500 employees, the new wage will be phased in over seven years. In addition, the new law allows employers to include tips to bring a worker’s wages up to the $15 minimum, but that provision ultimately phases out after seven years. Finally, the wage will also be indexed for inflation annually. The city projects that the wage will hit $18.13 by 2025.

Media coverage of opposition to the wage increase centered on restaurants. Seattle restaurant owners argue that the new law will force them to sideline expansion and hiring plans, force them to raise prices and possibly cut their hours of operation.

What This Means Going Forward:

Media coverage notes that organizations are already lining up to challenge the new law in court, but so far, no one is predicting how those challenges will play out or over how long a timeline. The experience in Seattle is likely to be closely watched by other municipalities considering sharp wage increases, such as Chicago and Providence, Rhode Island.

Further Reading:

The Seattle Post-Intelligencer, the Seattle Times, the AP, Reuters and the New York Times all report on the vote.

Related: NFIB Fights Job-Killing Federal Minimum Wage Hike

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